Songbird Estates, the owners of Canary Wharf, have "unanimously" rejected a takeover bid from Qatar, saying it undervalues the company.
The Qatar Investment Authority — which already owns Harrods and Chelsea Barracks — is bidding in tandem with Canadian developer Brookfield to win full control of Songbird Estates, itself a 69 per cent shareholder in Docklands landlord and developer Canary Wharf Group.
Qatar already owns a 28.6 per cent stake in Songbird but the joint venture’s opening 295p a share pitch was immediately dismissed by the Songbird board and the City.
Chairman David Pritchard said: “This proposal significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets.”
CWG — which has Sir George Iacobescu, pictured, at the helm — has a huge 11 million square foot development pipeline in London including the Wood Wharf extension to the original estate and the overhaul of the Shell Centre on the South Bank.
The company has built more than 16 million square feet of office space in the Docklands over the past 25 years, and still owns around half.
Analysts said the opening offer from Qatar and Brookfield was “far too low”, even coming in below Songbird’s net asset value per share — an important measurement in property — of 319p.
Oriel analyst Miranda Cockburn said Songbird could “comfortably justify a number closer to 400p” — valuing the company at £3 billion as Canary Wharf gears up for its next stage of growth.
Already the home to 105,000 workers, it is challenging the pre-eminence of the City and Crossrail arrives in 2018. “With London office values and rents rising rapidly, the prospect of Crossrail we think the portfolio has significant upside potential,” she said.
Peel Hunt analyst James Carswell added: “Given the inherent value within the development portfolio, we are not surprised by today’s rejection of 295p. An improved offer remains a real possibility.”
The joint venture will need to buy out other major stakeholders including US investor Simon Glick, the China Investment Corporation and Morgan Stanley.
Qatar and the CIC became major shareholders in 2009 as part of a bailout for CWG, which came close to collapse amid plunging commercial property values.Reuse content